Thursday, March 27, 2014

The staff of the Maine Public Utilities Commission has issued a report concluding that the use of "smart meters" -- advanced utility metering infrastructure capable of communicating wirelessly with the utility -- is a "safe, reasonable, and adequate utility service."

Smart meters and other new utility technologies offer the opportunity to cut ratepayer costs while enabling new and innovative services. Building on the ubiquity of cell phones, the internet, and other devices that can communicate using radio frequency emissions, smart meters can provide utilities with real-time data on each customer's consumption of electricity. This can eliminate the need for traditional meter readers, enable utilities to manage outages in real-time, and can open up opportunities for real-time pricing of electricity. Many utilities have adopted smart meters and other so-called "advanced metering infrastructure", including Maine's largest electric utility Central Maine Power Co.

But some people are concerned about the safety of smart meters, and in particular with the health effects of the radio frequency emissions associated with the meters' communication system. Utilities around the country have faced questions, and even legal challenges, over the safety of smart meters. As CMP rolled out its smart meter program, the Maine Public Utilities Commission received a series of complaints and requests for investigation into whether CMP's advanced metering infrastructure program complied with Maine law requiring utilities to provide safe, reasonable, and adequate utility service.

After legal proceedings before the Commission and Maine's highest state court, in 2012, the Commission opened an
investigation into
"the health and safety issue related to CMP's installation of smart meter technology." That investigation led to Tuesday's release of a Commission staff report (67-page PDF) summarizing the evidence it had collected and staff's conclusions. Highlights from the report include the following findings:

The
radio frequency (RF) emissions
from
CMP'
s smart
meters and other AMI
components
comply with duly promulgated federal safety regulations and other
RF emission
standards;

No state, federal, or Canadian regulatory body or health agency that has
considered the health impacts of smart meters (including Maine
's Center for
Disease Control and Prevention (Maine CDC)) has found smart meters to be
unsafe;

The scientific evidence presented in this proceeding is inconclusive with respect
to the human health impacts from
low-level
RF
emissions generally;

There are no
credible, peer-reviewed
scientific studies
in the record
that
demonstrate, or even purport to demonstrate,
a direct human health risk
specifically from smart meter RF emissions;

The studies that have been presented
in
the record
to demonstrate the risk to
human health from exposure to RF-emitting devices
are based on
exposure to
substantially
higher levels of RF
emissions
than smart meters;

The
relative RF emission exposure from smart
meters is significantly less than
other commonly used
RF-emitting
electronic devices; and

CMP'
s installation and operation of its smart meter system is consistent with
federal and
state energy policy and
is a
generally accepted utility practice
throughout the country.

Based on these findings, the staff report concludes that "CMP's installation and
operation of its smart meter system is consistent with its statutory obligation to furnish
safe, reasonable and adequate facilities and service." That said, the report also concurs with recommendations that continued research should be done on the impacts on human health from radio frequency emissions.

It now falls to the full Commission to take up the issue. Will the Commissioners agree with their staff's findings and conclusion?

Monday, March 24, 2014

The use of energy from biomass resources in the United States grew more than 60% over the decade between 2002 and 2013 -- primarily in the form of increased use of biofuels like ethanol and biodiesel that are produced from biomass.
﻿

A fuel pump displays prices for gasoline blended with up to 10% ethanol.

According to the U.S. Energy Information Administration, biomass accounted for about half of all renewable energy consumed in 2013 and 5% of total U.S. energy consumed. The three primary sources of this biomass are wood and forest products byproducts, waste including municipal solid waste and landfill gas, and raw organic feedstocks like corn and soybean oil used to produce biofuels.

Meanwhile, EIA data shows that consumption of wood and waste energy increased just 4% over the decade. About two-thirds of U.S. wood energy is consumed for industrial processes, while nearly all U.S. waste energy is consumed for electric generation or industrial processes.

If this trend continues, woody biomass and waste energy will continue to hold their positions in our portfolio of energy resources, while continued growth in the conversion of biomass into biofuels for transportation and other needs will increase biofuels' weighting in the nation's energy mix. At the same time, debates continue over the cost and value of programs encouraging the growth of corn as a biofuel feedstock. What does the future hold for biomass in the U.S.?

Friday, March 21, 2014

Federal regulators have issued a pilot license for a proposed tidal energy project in Washington.

Tidal waters off the Maine coast.

Yesterday, the Federal Energy Regulatory Commission issued a 10-year pilot license to Public Utility District No. 1 of Snohomish County for the proposed Admiralty Inlet Pilot Tidal Project. The 600-kilowatt hydrokinetic project, to be located in Puget Sound in the state of Washington, is designed as a temporary, experimental project to evaluate the commercial viability of tidal energy development in Puget Sound.

According to the Commission's Order Issuing Pilot Project License (85-page PDF), the proposed project features two tidal turbines to be manufactured by OpenHydro, each measuring 6 meters in diameter, secured to the seabed by the turbines' 414-ton weight. Peak tidal currents at the site exceed 3 meters per second. The Public Utility District plans to connect the project to the mainland grid via subsea cables connecting to District-leased land south of the Coupeville Ferry Terminal.

In granting the pilot license, the Commission considered a range of possible resource impacts from the project. The site lies near key shipping lanes to the ports of Seattle, Tacoma, Olympia, and Everett, and is near a key trans-oceanic fiber optic cable connecting North America to Japan. To address concerns over impacts to these resources, the Commission imposed conditions and monitoring requirements on the project.

The Commission's pilot licensure program differs somewhat from its general licensing of hydropower projects. As described in a whitepaper on the pilot project licensing process prepared by Commission staff, pilot projects should be (1) small; (2) short term; (3) located in non-sensitive areas based
on the Commission’s review of the record; (4) removable and able to be shut down on
short notice; (5) removed, with the site restored, before the end of the license term (unless
a new license is granted); and (6) initiated by a draft application in a form sufficient to
support environmental analysis. Projects meeting these criteria enjoy a streamlined regulatory review process.

With the pilot license in hand, the Public Utility District may prepare for project development. But if the project goes forward, the District may have to justify its costs. As noted in the Commission’s order, the project has relatively high
capital, operation, and maintenance costs with respect to the amount of
power produced.
According to the Commission’s order, the levelized annual cost of operating the project will be about $1,848,294, or $7,574.98 per megawatt-hour of energy generated -- significantly higher than the estimated $30/MWh cost of alternative power. Based on an estimated average annual generation of 244,000 kilowatt-hours as licensed, Commission staff projects that in the first year of operation, the project power will
cost $1,840,974 more than the cost of alternative power.

Thursday, March 20, 2014

The New Jersey Board of Public Utilities has voted against extending ratepayer subsidies to an offshore wind project proposed by developer Fishermen's Energy, challenging the project's financial viability.

The New Jersey coast near Atlantic City, seen from above.

Back in 2011, Fishermen's Energy proposed a 25-megawatt offshore wind pilot project to be located off Atlantic City. The developer applied to the Board of Public Utilities for ratepayer support under New Jersey's Offshore Wind Economic Development Act of 2010. That law directed the Board of Public Utilities to
develop a program to require utilities to source a percentage of the electricity they sell in New Jersey from one or more qualified offshore wind projects. To track energy from offshore wind, the law envisioned the creation of offshore renewable energy certificates, or ORECs, that could be sold by qualified offshore wind projects to the load-serving utilities. The concept was that given the relatively high costs and uncertainty of offshore wind, no project could be financed or built without a steady revenue stream from OREC sales.

But the New Jersey project appeared to stall before the Board. Charged with creating the OREC program and evaluating whether the Fishermen's Energy project could qualify to produce ORECs, the Board was faced with serious technical tasks. As the regulatory process for the Fishermen's Energy project lengthened -- ultimately stretching to over 1,000 days -- Board staff raised concerns over the financial viability of the project, as well as over the impact of the requested subsidy to ratepayer costs. Despite trimming the project's estimated costs to $188 million, these concerns remained, leading Board staff to recommend denial of Fishermen's Energy's request for OREC certification.

Yesterday, the Board of Public Utilities rejected
Fishermen’s Energy’s proposal by a unanimous 4-0
decision. While the Board's formal written order has not yet been released, expect it to explain the Board's reasoning in more detail when it surfaces next week. In the meantime, Fishermen’s Energy is undoubtedly considering its options, which may include dropping the project, appealing the Board's rejection, or finding alternative ways to de-risk and finance the project.

Wednesday, March 19, 2014

Will New Jersey regulators approve key support for an offshore wind project proposed off the Jersey shore?

Many coastal states and nations are placing new focus on energy projects designed to generate electricity from offshore winds. A project off New Jersey, first proposed in 2011, appeared to make some initial progress, but has since seemed to stall -- due in part to regulatory delays at the state level. With a decision by the state Board of Public Utilities (BPU) expected this week, will the Fishermen's Energy offshore wind project move forward?

Fishing boats in a small harbor along Maine's midcoast.

The New Jersey coast offers a fairly unique combination of wind resources and proximity to customer demand. To capitalize on this combination, the New Jersey legislature and government adopted measures promoting the development of the state's offshore wind resource. For example, New Jersey's Energy Master Plan calls for an ambitious target of 1,100 megawatts of offshore wind installed by 2020.

But nearly 3 years later, the state OREC review process remains ongoing. Last year, BPU Staff recommended the BPU reject Fishermen’s project on the grounds that it demonstrated no economic benefits but bore unnecessary technology risk due to its selection of XEMC turbines. But project advocates, including the New Jersey Rate Counsel, support the project for its apparent consumer benefits. Nevertheless, the BPU has yet to approve an OREC program.

Before most existing projects may expand, they need to secure a license amendment from the FERC allowing changes to the project. Planned and upcoming project expansions will drive significant relicensing in the coming years.

The age of the nation's existing hydropower projects will also drive additional relicensing activity in the near term. Of roughly 2,000 existing hydropower licenses and exemptions issued by the FERC, nearly one-quarter will expire within the next 15 years. Since dams have relatively high construction and permitting costs and relatively long useful lives, since demand for renewable electricity remains relatively high, since most dams were built decades ago and since existing licenses typically run for 30 to 50 years, most of these existing dams will likely apply for new licenses before the terms of their existing licenses expire.

For these reasons, expect to see significant re-licensing activity around hydropower projects in the next decade.

Monday, March 17, 2014

In the wake of last year's sniper assault on a California electrical substation, federal regulators have initiated a process to require utilities to demonstrate that they have hardened their power plants, transmission lines, and other infrastructure against physical attacks. Last week the Federal Energy Regulatory Commission ordered the North American Electric Reliability Corporation, or NERC, to develop reliability standards requiring utilities to address risks due to physical security threats and vulnerabilities. If NERC adopts reliability standards to protect against physical threats, will the standards improve electric reliability -- and if so, at what cost?

Stacks from a power plant subject to NERC standards rise above a cove in Salem, Massachusetts.

First, owners and operators must perform a risk assessment of their system to identify their "critical facilities". Critical facilities are defined as those that, if rendered inoperable or damaged, could have a critical impact on the operation of the interconnection through instability, uncontrolled separation, or cascading failures of the Bulk-Power System.

Second, owners and operators of critical facilities must evaluate potential threats and vulnerabilities to those facilities.

Third, owners and operators must develop and implement a security plan to address potential threats and vulnerabilities.

The order directing physical protections standards has prompted at least two sets of questions in the utility industry. First, will these standards lead to improved reliability? While the efficacy of the standards will likely only be proven in retrospect, if at all, fears brought to life by the California attack and others have convinced a majority of the Commission that the standards are necessary.

Other questions have arisen about the cost of implementing the standards. While some defenses against physical threats may be adopted relatively inexpensively -- for example, opaque fencing around critical facilities -- others may prove expensive. When the possible scope and extent of critical facilities are taken into account, some estimates of the potential cost -- including that of concurring FERC Commissioner John Norris -- rise into the billions.

Under the Commission's order, NERC has until June 5, 2014, to prepare and submit its proposed new reliability standards.

Thursday, March 13, 2014

Switch, a 2009 documentary produced by Harry Lynch and geologist Dr. Scott Tinker, describes some of the changes affecting the production and consumption of energy resources around the world. From coal and oil, to nuclear power and renewable resources, to energy efficiency, the way society produces and converts fuels and other energy resources into useful power is shifting. These changes are driven by advances in technology, as well as market and regulatory forces. The movie features visits to places including a coal mine, geothermal power plant, and a hydropower station, coupled with interviews with industry and regulatory leaders about how they are responding to these forces.

Following the movie, the hosts have asked me to give a brief presentation on Maine's portfolio of energy resources and to answer questions from the audience. I'm looking forward to the event!

Friday, March 7, 2014

Solar and geothermal resources led the new utility-scale electric generating capacity installed in the U.S. in January 2014, according to a report by the staff of the Federal Energy Regulatory Commission. In all, the report identified 325 megawatts of new generation placed in service in January, substantially all of which is powered by renewable resources.

Old Faithful Geyser erupts in Yellowstone National Park -- a natural geothermal feature.

Geothermal steam power was the second largest category of new electric generating capacity placed in service in January 2014, in the form of Gradient Resources Inc.’s 30 MW Patua Hot Springs Geothermal project in Lyon County, Nevada. As with the solar projects described above, the power
generated by the Patua Hot Springs project is sold to a utility -- in this case, Sacramento Municipal Utility District, under a long-term contract.

Rounding out the new capacity installations in January were 3 small biomass units with a combined capacity of 3 megawatts, and one wind project with an installed capacity of 4 megawatts -- Consolidated Edison Inc.’s 4 MW Russell Point Wind Farm project in Logan County, Ohio.

Despite this growth in solar and geothermal power resources, together these resources account for just over 1% of the nation's total installed operating generating capacity. Yet the relative growth in solar and geothermal power over the past years has been striking, and is expected to continue for the near term. Will these resources soon play a larger role in the nation's energy portfolio?

OPT also won preliminary permits from the FERC to study the feasibility of larger projects off Reedsport, including a 15 megawatt "Phase II" and the 50 megawatt "Phase III" project. OPT's Phase III preliminary permit gave it three years to study the feasibility of the "Reedsport Expanded Project", after which OPT could seek a license to develop and operate the larger scale phases.

That permit was set to expire on February 28, 2014. Given the technological, permitting, and community engagement challenges raised by developing any advanced energy project, many permittees find that they need more than 3 years to study a site. The FERC allows such developers to seek successive preliminary permits, effectively extending the due diligence period for qualified developers able to show real progress.

But based on a February 28, 2014, FERC filing, OPT announced that it would not seek a successive preliminary permit at this time, and would instead surrender the Phase III preliminary permit. In its filing, OPT acknowledged the significant efforts made by the state of Oregon to facilitate wave energy projects, but noted the challenges interposed by a cascading series of unforeseen delays:delays in the Phase I study and development processes, resulting delays in the Phase II consultation, licensing, study, and monitoring processes, and "increased project-related costs." Ultimately, OPT noted that while it continues to evaluate its Phase I and Phase II implementation options, "OPT's plans for an expanded Phase III Project are sufficiently uncertain at this time that the company cannot justify requesting an additional three-year preliminary permit extension."

About Preti Flaherty

Preti Flaherty is one of northern New England's largest law firms, with more than 100 attorneys. We work with clients as creative, strategic partners to help move their businesses forward. With offices in Maine, New Hampshire, Massachusetts, Washington D.C. and expertise in multi-state and cross-border matters, Preti Flaherty has emerged as a thriving, regional firm.

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About this blog

A blog about energy resources, energy policy, and their effects on society and the environment. From fossil fuels to renewable energy, electricity to natural gas and oil, traditional technologies to innovations, this blog presents a look at the past, present, and future of energy.

This blog site is published by and reflects the personal views of Todd Griset, in his individual capacity. It does not necessarily represent the views of his law firm or clients, and is not sponsored or endorsed by them. The purpose of this blog site is to assist in dissemination of information about energy policy and related issues, but no representation is made about the accuracy of the information. The information contained in this blog site is provided only as general information for education purposes, and blog topics may or may not be updated subsequent to their initial posting.

By using this blog site you understand that this information is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice. This blog site should not be used as a substitute for competent legal advice from a licensed attorney in your state. This blog site is not intended to be advertising and Todd Griset does not wish to represent anyone desiring representation based upon viewing this blog site in a state where this blog site fails to comply with all laws and ethical rules of that state.